The President of the Peasant Farmers Association of Ghana (PFAG), Weipa Addo Awal, has said market inefficiencies in Ghana’s food distribution system are widening the price gap between farm gate sales and urban retail markets despite inflation hitting 3.8 per cent, stressing that producers continue to face losses while consumers pay more.
He said maize prices in farming communities remained significantly lower than those in urban centres due to transportation costs and multiple layers of trading that absorbed most of the margins within the value chain.
“A bag of maize hovered around GH¢300 or less in farming centres, but the price more than doubled in cities such as Accra, Kumasi and Takoradi because middlemen, transport costs and profit margins accounted for the increase,” he said.
In an interview with Graphic Business, he said the price disparity illustrated inefficiencies across the distribution system, noting that producers lacked bargaining power while traders dictated prices at the farm gate.
“When buyers come to the farming areas, they determine the price they would pay, but the same produce is sold at far higher levels in urban markets, showing clear imbalances in the value chain,” he said.
He said rising input costs were compounding the situation, particularly fertiliser prices, which had climbed beyond the reach of many producers relative to their earnings.
“Fertiliser is sold between GH¢450 and GH¢500 per bag, while maize is sold for about GH¢300, meaning farmers needed to sell two or three bags just to buy one fertiliser bag,” he said.
Mr Awal said the challenge extended to rice production, with stockpiles of unsold paddy rice accumulating in several farming areas due to weak market linkages.
“There was surplus paddy rice in communities such as Tumu and other producing areas, and farmers struggled to find buyers even after reducing prices,” he said.
He said attempts to stimulate demand had not resolved the situation, highlighting severe liquidity constraints among producers.
“In some cases farmers offered extra bags of rice at no additional cost to attract buyers, yet the market remained weak,” he said.
Value chain gaps
He said limited institutional purchasing further worsened the imbalance, particularly delays in buffer stock interventions expected to absorb excess supply.
“Farmers waited for buffer stock purchases to clear their produce, but the response remained slow, leaving them holding inventory without cash flow,” he said.
Mr Awal said the imbalance between rural supply and urban retail pricing left farmers operating at a loss while traders captured most of the value generated across the chain.
“Producers sold at low prices and struggled to recover production costs, while consumers in cities still paid high prices,” he said.
He said resolving the situation required investment in supply chain infrastructure to reduce inefficiencies and improve coordination between production and markets.
“Improved storage, aggregation and transport systems would help stabilise pricing and ensure both farmers and consumers benefitted from agricultural output,” he said.
Source:
www.graphic.com.gh